ACC221 Final Exam

operating activities

a measure of how much cash was generated or used by the operations

investing activities

measure of how much cash was generated or used by activites related to investing in the company

financing activities

measure of how much cash was generated or used by activities related to financing the company

net profit margin %

measure of how much of every $1 of revenue was turned to profit

current ratio

measure of liquidity

ability of a company to meet its short term payments

debt to equity ratio

measure of the degree to which a company is financing its operations with debt rather than their own resources

working capital

whats left after a company uses current assets to pay off its current liabilities

return on equity

performance measure

shows how efficiently a company generates profits

method of financial analysis

projecting into the future the impact on profit if we pursue another alternative

separation of duties

the person doing the accounting is not the same person signing the checks

access controls

passwords

different people have different levels of access

physical audits

hand counting cash or inventory

reconciliations

comparing the accounting system balance to the actual physical balance and accounting for differences

trial balances

pre-closing T/B

do debits = credits

standardized documentation

paper trail

documents indicating goods have been received or sent

approval authority

requiring a second signature on checks or larger purchases

FASB financial accounting standards board

sets accounting rules for public companies

GAAP generally accepted accounting principles

accounting rules

SEC securities and exchange commission

enforcer of public companies, so companies follow rules and do not commit fraud

IRS internal revenue services

enforce that we report our income and pay taxes

white collar crime

nonviolent financial offense committed by a business or organization for illegal monetary gain

CPA

certified public accountant

manufacturing companies

companies that make and sell their products

merchandising companies

companies that will buy goods and then resell them at a higher price

service companies

companies that perform a service